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Computing an Exponentially Smoothing Forecast

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The manager of the BP Service Station wants to forecast the demand for unleaded gasoline next month so that the proper number of gallons can be ordered from the distributor. The owner has accumulated the following data on demand for unleaded gasoline from sales during the past 10 months.

Month Gasoline Demanded (gal)
Oct. 800
Nov. 725
Dec. 630
Jan. 500
Feb. 645
Mar. 690
Apr. 730
May 810
June 1,200
July 980

a. Compute an exponentially smoothing forecast using an alpha value of .30.
b. Compute an adjusted exponentially smoothed forecast (alpha = .30 and beta= .20).
c. Compare the two forecasts using MAPD and indicate which seems to be more accurate.

Please show all work to help me understand and the computed values of formulas in problems.

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Solution Summary

This posting provides a solution in Excel for computing an exponentially smoothing forecast.